The gold price reached almost £900 per troy ounce on Wednesday, nearing its highest point in almost a year.

At 15:15 yesterday (24 February) it stood at £897.33, up from £853.63 at 09:00 on Monday (22 February). This morning, gold cost £889.26 per troy ounce at 09:00.

Gold is offering its traditional safe haven for investors during choppy economic waters. Statistics released in the US this week showed the services sector shrank for the first time since late 2013, and disappointing house sales data was also published for January.

Although gold generally rises when the US dollar is weak, it gained strength yesterday while the dollar was performing well, although the currency lost value later in the day.

Jens Pedersen, senior analyst at Danske Bank, told Reuters yesterday: “Gold is rising on the back of weak risk appetite, but what stands out today (Wednesday) is that the market is rising even though the dollar is higher as well.”

Is gold a better safe haven that silver?

Investors seeking a safe haven for their cash generally turn to gold or silver. Of the two precious metals, gold is obviously the more expensive but is also often seen as a less volatile, and therefore a less risky investment than silver.

One of the reasons gold is thought to be a steadier choice is because silver is used more in industrial applications, so silver’s price is more dependent on the performance of the markets.

Russ Mould from broker AJ Bell told the Daily Telegraph: “Only 10 per cent to 15 per cent of gold demand comes from jewellery and industrial uses, while for silver this figure exceeds 50 per cent as it is used in areas such as batteries, LEDs, solar energy, dentistry and photography.

“Silver’s greater industrial use means it is more sensitive to the industrial cycle and potentially less of a haven than gold. This is also reflected in silver’s greater historic price volatility.”

Investing in gold bullion bars or gold or silver coins comes down to personal budgets and your own analysis of the market. As the old adage says: “You pays your money and makes your choice.”

Indian gold imports fall

India is set to record gold imports of around 25 tonnes this month, a two-year low for the world’s second biggest gold bullion buying nation.

It comes amid efforts by the Indian government to reduce its gold import duty costs, which stood at $36 billion last year.

Within the Indian market, demand for the precious metal has been subdued while consumers and jewellers wait to see whether the government will reduce the import tax in its budget at the end of the month. A similar dampening down of demand was seen ahead of the last budget, when the Indian government failed to reduce the duty.

The import duty was set at a record high of 10 per cent in 2010 as part of efforts to reduce the amount of gold flowing into India. However, this resulted in an upswing in smuggling; Reuters estimates that around 175 tonnes of gold were illegally brought into the country in 2014.